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Marketing Matters Pty Ltd v QLD Painting & Coatings Pty Ltd QCAT 265
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Marketing Matters Pty Ltd v QLD Painting & Coatings Pty Ltd  QCAT 265
MARKETING MATTERS PTY LTD
QLD PAINTING & COATINGS PTY LTD
4 September 2019
23 February 2017; 24 February 2017; 2 November 2017; 3 November 2017; 16 February 2018
PROFESSIONS AND TRADES – BUILDERS – STATUTORY POWER TO REQUIRE RECTIFICATION OF DEFECTIVE OR INCOMPLETE BUILDING WORK – commercial building dispute – application for reimbursement of monies paid and relief from further charges on basis of unreasonable costs being charged – costs of rectification sought-dispute as to scope of works
Queensland Building and Construction Commission Act 1991 (Qld), s 75, s 77, Schedule 2
APPEARANCES & REPRESENTATION:
Self-represented by P Cordner and G Stewart
Self-represented by B Roberts
REASONS FOR DECISION
- Ms Cordner and Mr Stewart are the directors of the applicant company which operated a restaurant in Airlie Beach. They contracted with Mr Roberts, who is the director of the respondent company, to undertake works at their premises in late 2014. The dispute concerns the amount charged for the works, what works were included and whom should be responsible for the costs incurred of subsequent ‘rectification’ of the painting of steelwork.
Background to matter proceeding to Tribunal and Tribunal’s jurisdiction
- On 2 February 2015 QLD Painting & Coatings filed an Application for minor civil dispute-minor debt claiming an amount owing for work carried out and invoiced to Marketing Matters of $22,316.25 together with costs (MCD 219-15). Judgement by default was obtained but subsequently set aside and the time for a response extended, with Marketing Matters filing a response on 15 April 2015.
- In January 2016 Marketing Matters lodged a complaint with the Queensland Building and Construction Commission and was advised that, having assessed the subject of the complaint, the Commission was unable to assist. The legislative provisions with regards to the Commission’s dispute resolution process having been complied with, Marketing Matters then filed an Application for commercial building dispute against QLD Painting on 28 January 2016. That Application sought: relief from payment of amount claimed of (erroneously) $23,316.25 (the amount claimed was $22,316.25); damages and interest on the damages of $11,027.55; rectification or completion of defective work of $13,597.65; and costs.
- QLD Painting filed a Response and/or counter-application on 31 March 2016 which sought to dismiss the ‘counterclaim’ of Marketing Matters and asked the Tribunal to ‘rule in our favour’ but without setting out any claim.
- Marketing Matters filed an amended Application on 21 September 2016 increasing the claim for rectification or completion of defective work to $16,973.50 and costs to $28,001-05. The figures set out under general dispute details at Part B do not apparently correlate to the figures set out in ‘Annexure A’, referred to in Part D ‘Details of what you seek from the Tribunal’.
- At the first item of that Annexure A, Marketing Matters states:
I want the tribunal to make the following orders:
1.The Respondent pay to the Applicant the sum of $50,000 by way of refund of overpayment, rectification costs, loss of income and fees incurred as detailed below. (Although our claim is $61590.01 we would settle for $50,000 in order to have the matter resolved as quickly as possible.) (Emphasis added)
- It was not subsequently raised by either party, but I treat this statement as Marketing Matters restricting its claim to an amount of $50,000 which gives the tribunal jurisdiction to hear the matter as a minor commercial building dispute without the need for the parties to consent to the tribunal’s jurisdiction as would be required if the claim (or counter-claim) had exceeded $50,000. Additionally at Part B of the Application, Marketing Matters ticked the ‘No’ box to the question ‘Is your application making a claim for an amount of more than $50,000?’
- The sums sought by Marketing Matters to be paid by QLD Painting which are not costs of the application are:
- (a)$11,027.55, refund of alleged overpayment;
- (b)$16,973.50, rectification costs;
- (c)$20,473.98, losses by business;
This amounts to $48,475.03 in total.
- So, in fact, the total claim is for an amount less than $50,000. The additional amounts on the Annexure A totalling $13,114.98 which have been added in by Marketing Matters to total $61,590.01, are the filing fees, quantity surveyor’s fees and legal costs and are therefore the costs of the proceedings, which should be separately addressed.
- QLD Painting filed an amended Response and/or counter-application on 10 October 2016 which sought Marketing Matter’s Application be dismissed and claimed $22,316.25 together with, $2,348.55 interest, $3,500.00 legal costs; $4,023.00 accountancy fees, $294.60 filing fees and $9.00 search fees, a total of $32,491.40.
- By direction on 4 March 2016 the Tribunal transferred MCD219-15 to the building list to proceed as an application for a commercial building dispute and inter alia, directed that (if a further direction was complied with) matters MCD219-15 and BDL219-16 (although incorrectly described in the direction as BDL219-15) be consolidated.
- The application relates to a building dispute pursuant to the Queensland Building and Construction Commission Act 1991 (Qld) and is ‘tribunal work’ as defined. As discussed above, the claim being not more than $50,000, the dispute is characterised as a minor commercial dispute pursuant to Schedule 2 of the Act. There were no contentions or submissions from either party relating to the Tribunal’s jurisdiction in the matter.
- Directions made 14 December 2016 as to the filing of material and the further conduct of the matter included provision for Marketing Matters to be the Applicant in the Application and the Respondent in the Counter Application and QLD Painting to be the Respondent in the Application and the Applicant in the Counter Application.
- I note that the Respondent was erroneously referred to as QLD Paintings & Coatings Pty Ltd in the Application filed 28 January 2016 rather than QLD Painting & Coatings Pty Ltd and that error has been carried over throughout the Tribunal’s documents but clearly the correct spelling is without the ‘s’. For completeness I will make a direction that the Respondent be referred to accordingly.
Matters progress to hearing
- At the Directions hearing on 14 December 2016 the matter was listed for an experts’ conclave on 30 January 2017, a further directions hearing on 15 February 2017 and for hearing on 23 and 24 February 2017.
- At the experts’ conclave, directions were made, inter alia, for the experts to exchange documents within 7 days, for QLD Painting’s expert, Mr Bean, to arrange a site inspection within 28 days after that exchange and for the experts to prepare and lodge a joint report within 14 days of that inspection.
- Those time frames did not necessarily align with the hearing dates. Mr Bean however, attended a site inspection on 10 February 2017 and at the Directions Hearing on 15 February 2017, the date for the joint report to be provided was brought forward to 17 February 2017 and the hearing dates confirmed.
- On the first listed date for hearing Mr Roberts for QLD Painting, sought that the hearing be adjourned on the basis that Mr Bean had been unable to comply with the direction to provide the joint report because of previous commitments which he had at the time the date for compliance had been brought forward.
- The adjournment was opposed by Marketing Matters and the application dismissed by me on the basis that Mr Roberts advised his expert, Mr Bean, would be consulting that evening with the applicant’s expert, Mr Lowry, with the joint report expected to be available the following day. Other interlocutory applications were dealt with prior to the commencement of the hearing that day.
- On the second allocated day for hearing, Mr Bean forwarded a lengthy new report which was not a joint report as expected and had not been formulated with any consultation with Mr Lowry. An adjournment by consent was allowed on the basis of the need for both parties to consider that new report and the hearing was adjourned part heard after half a day. At a directions hearing on 9 March 2017 I dispensed with the requirement that the experts attend a conclave and produce a joint report and directed that the experts give evidence concurrently and by telephone with any evidence that would have been in a joint report to be given orally. Both parties indicated unavailability during March to May 2017 and the matter was allocated a further two days for hearing on 14 and 15 June 2017.
- Marketing Matters subsequently sought a further adjournment to address the matters raised in the new report of Mr Bean as Ms Cordner had suffered serious injury to her arm. The matter was allocated hearing dates on 2 and 3 November 2017.
- The hearing of the matter continued on 2 November 2017 but on the morning of 3 November 2017, Mr Roberts was too ill to proceed. It was necessary to further adjourn the matter part heard. The final date of hearing was 16 February 2018.
- Marketing Matters filed a Response to QLD Painting’s initial Application for minor civil dispute-minor debt, the Application and Amended Application for commercial building disputes and a document titled ‘Applicant’s Reply to the Amended Response and Counterclaim of the Respondent’ on 18 October 2016.
- Marketing Matters filed a number of purported ‘joint’ statements by Ms Cordner and Mr Stewart dated; 1 July 2016, (multiple) dated 6 December 2016, 18 January 2017, 19 January 2017 and 11 August 2017 (in response to the report of Mr Bean, below). Statements should not have been made jointly and this contributed to the difficulty of both parties in giving oral evidence.
- Additionally filed were statements solely by each of Ms Cordner and Mr Stewart dated 24 May 2016.
- Marketing Matters also filed statements by: Lindsay Bates, the builder who constructed the extension, dated 20 May 2016; Ben Raymant, the operator of Sublime Quality Painting, dated 21 May 2016, although he did not attend the hearing and his statement was not relied upon; Steve Mackenzie, the operator of Mackenzies’ Coatings and Finishes Painting Contractors, dated 24 May 2016, 4 November 2016 and 19 January 2017; Andrew McDonald, the building certifier employed by the regional council, dated 24 May 2016; Lolita Laurent a former employee, dated 1 September 2017; and Angela Rae, former employee dated 1 September 2017.
- Marketing Matters engaged Quantity Surveyor, John Lowry in the matter and Mr Lowry’s report is dated 20 January 2016.
- QLD Painting filed the initial Application for minor civil dispute-minor debt, the Response and/or counter application and Amended response and/or counterclaim and an undated document filed 20 June 2016 termed ‘Response to Applicants Statements of Claim’ which is a 19-paragraph document which appears to be a statement by Mr Roberts. Included with that latter document was an unsigned letter from employee Ian Harris, a letter from Ian Bean (see below) and various timesheets, payslips and bank records.
- QLD Painting filed a number of statements by Mr Roberts: undated but filed 11 January 2016; undated but filed 20 June 2016 (noted above); and undated but filed 28 November 2016.
- Additional statements were filed by: Julie Roberts, Mr Roberts’ wife who was employed as accountant for QLD Painting, undated but apparently filed 11 January 2016; Rachel Raitt accountant/bookkeeper for Ms Roberts’ firm, undated but filed 28 November 2016; Ian Harris, employee of QLD Painting, undated but filed 28 November 2016 as well as the letter mentioned above; and Christopher English, employee of QLD Painting, undated but filed 28 November 2016 (who had passed away at the time of the hearing being resumed).
- QLD Painting engaged Quantity Surveyor, Ian Bean, who has provided letters by way of reports dated 16 June 2016 and 23 February 2017.
- Additionally the Tribunal was provided with various other documents, photographs, screen shots of texts and emails.
- Witnesses who gave oral evidence for Marketing Matters were Ms Cordner, Mr Stewart, Mr Bates, Mr Mackenzie, Mr McDonald, Ms Laurent, Ms Rae and Mr Lowry.
- Witnesses who gave oral evidence for QLD Painting were Mr Roberts, Ms Roberts, Ms Raitt, Mr Harris and Mr Bean.
- The parties were granted leave to be legally represented by direction made 14 September 2016 and although it appears solicitors assisted both parties earlier in proceedings, ultimately neither had legal representation at the hearing.
- The conduct of a hearing can be difficult for self-represented parties. In this matter there were a number of challenging circumstances for the parties including the delay in the progress of the matter for various reasons, which I have attempted to summarise above and the need for parties to travel for hearings. Material was sought to be filed by both parties which contained gratuitous and irrelevant comments and accusations. I allowed that material but it could have no bearing on my decision. There were allegations of intimidating behaviour occurring outside of hearings. On a number of occasions profanity was used in the hearing room. The animosity between Mr Stewart and Mr Roberts in particular, was obvious and I sought to ensure that it did not significantly impact the hearing. I allowed the parties a great deal of latitude in not only the material presented, but the manner in which they presented their cases. An example of that was swearing in both parties at the commencement so that what would otherwise be assertions from the bar table could be included in evidence. It is unfortunate that the parties have now endured further delay in receiving my decision.
Claims made by Marketing Matters
- Mr Stewart and Ms Cordner are business partners involved in multiple businesses. A unit trust was the owner of the building in which two separate businesses functioned. A motel was operated by Fusion Airlie Beach Pty Ltd and a restaurant by Marketing Matters.
- In August 2014 Lindsay Bates Building Construction Services commenced construction of a two storey steel framed extension to the front of the building at a quoted cost of $153,000. A final council inspection and certification was carried out on 9 December 2014. Throughout the construction Mr Stewart and Ms Cordner continued to operate the motel and worked on setting up the restaurant on the ground level of the building, which they planned to have operational before Christmas 2014.
- Their usual painter, Steven Mackenzie, was busy in the lead up to Christmas. Ms Cordner looked into other local painters and contacted Mr Roberts as a result of an advertisement she read for QLD Painting. She arranged to meet Mr Roberts onsite to discuss the works. It was agreed that QLD Painting commenced work for Marketing Matters on 27 November 2014 and left the site on 24 December 2014.
- It is uncontentious that QLD Painting invoiced Marketing Matters for three separate amounts for work claimed to be performed at the Airlie Beach premises. The first invoice dated 5 December 2014 for $15,782.25 was paid in full by Marketing Matters. The second invoice dated 12 December 2014 was for $10,172.25 and the third invoice dated 7 January 2015 was for $12,144.00. The total of those two later invoices, $22,316.25, was the sum claimed by QLD Painting in their initial application and is still sought as outstanding.
- Marketing Matters contends that QLD Painting grossly overcharged for the work carried out. An assessment by quantity surveyor, Mr Lowry, estimated the reasonable cost for the work performed to be $4,323.00. On that basis Marketing Matters claims that QLD Painting should refund the sum of $11,027.55 and that Marketing Matters should be relieved from paying the further amount sought.
- Marketing Matters further claims that QLD Painting caused damage which cost $16,973.50 to rectify and that the process of rectifying the damage resulted in losses to the business of $14,777.28 for lost rent, $2,021.70 outgoings and $3,675.00 loss of income from their motel. Thus the total sought by Marketing Matters to be paid by QLD Painting is $48,475.03.
Response by QLD Painting & Coating
- QLD Painting & Coating’s position is that it was contracted to carry out works at an hourly rate plus materials. The invoices set out the man hours and materials actually incurred and which QLD Painting & Coating is entitled to charge according to the oral agreement. Additionally, Mr Bean’s second report supports that the costs as invoiced were reasonable. As regards the costs of rectification sought by Marketing Matters, QLD Painting’s position is it had commenced, but was not able to complete, the work it was contracted to carry out and should not be responsible for the costs sought by way of ‘rectification.’
The agreement between the parties
- At their initial meeting in November 2014, Ms Cordner walked Mr Roberts around the restaurant which was in the process of being renovated with multiple trades on site. No written agreement was made and no price for the work determined; it was simply agreed that Mr Roberts would charge an hourly rate of $45 plus materials. They did not discuss how many painters would be on site. She told Mr Roberts they wanted to open the restaurant before Christmas. Mr Roberts was asked at that first meeting to perform a number of works. At later dates he was asked to perform additional works.
- Ms Cordner relied on an advertisement for QLD Painting which described the services offered as ‘professional and reliable’ as supporting an argument that it was unreasonable for QLD Painting to charge out all the employees at $45 per hour. Ms Cordner’s evidence was that she made the assumption that the painters used by QLD Painting would be ‘qualified’ professionals although she could not say it was raised by her in discussions with Mr Roberts. Ms Cordner also assumed that invoices would be supplied as to the materials. Again, she could not say that was specifically agreed in the discussion on site.
- Mr Roberts said the agreement was for him to charge $45 per man hour plus the cost of materials.
- Ms Cordner’s evidence was that at that initial meeting she asked Mr Roberts carry out a number of works. By the date of the hearing she expressed some difficulty with remembering what was discussed at the initial meeting and what arose later as she described it ‘as a continuum of things that arose.’ Both she and Mr Stewart recollected it was a situation where once QLD Painting came onto the site they were continually there until leaving on 24 December 2014. Their evidence was that at no time was a particular set of work completed such that QLD Painting packed up and left the job and were then asked to return to complete new work.
- Mr Roberts, at the hearing, rejected that description by Ms Cordner maintaining that QLD Painting was asked to carry out work on three separate occasions with his company leaving the site and being requested to return by Marketing Matters. That assertion contradicts the situation set out in the Application for minor civil dispute made by QLD Painting. The attachment to that Application sets out that, after agreement was reached about the hourly rate and work commenced:
During the course of performing such works, Bryan Roberts was then approached and further works beyond the original scope were requested and agreed upon under the original payment terms. (Emphasis added)
- The Application by QLD Painting then goes on to outline that after the first invoice was paid, work continued and was completed and the second invoice issued with Mr Roberts being contacted two weeks later and asked to ‘complete further works’.
- The evidence on behalf of Marketing Matters also set out Ms Cordner’s and Mr Stewart’s concern and unhappiness about the manner in which a number of QLD Painting’s employees conducted themselves on site and their lack of productivity. They were happy with some of the men and the work carried out but described others constantly leaving the site, breaking to eat or smoke or use the telephone, leaving rubbish and not showing regard for workplace health and safety. Ms Cordner and Mr Stewart said Mr Roberts agreed to remove one of these men from site after they complained. A lack of supervision by Mr Roberts or anyone else was alleged.
- Mr Roberts contended that he did not receive such complaint from Ms Cordner or Mr Stewart until he was chasing up payment of his second invoice although he agreed he had removed one employee from site following their complaint about that employee’s lack of work.
Scope of Works Undertaken
Works to the restaurant interior
- Regarding the restaurant ceilings, it was stated by Marketing Matters in the scope of works provided to Mr Lowry, that this involved sanding and one coat of gloss acrylic. Ms Cordner’s statement dated 24 May 2014 is not so specific listing the work as ‘Prepare and paint interior restaurant ceilings’. In oral evidence Ms Cordner said the restaurant ceilings had been finished in a stucco which did not meet council requirements. Before Mr Roberts’ involvement, they had already had them sanded back, plastered and undercoated. She asked that Mr Roberts sand them again and repaint them as council required that they be painted in gloss acrylic. The ceilings of three adjacent toilets, although accessed from the rear of the building, also required painting. In oral evidence she said she left it up to Mr Roberts as to how many coats were needed.
- Marketing Matters evidence was that QLD Painting was asked to top coat three interior walls to which they had already applied one top coat and supplied Mr Roberts with the red paint left from that. In Ms Cordner’s words in oral evidence, she asked Mr Roberts ‘where they were still a bit rough, if he could tidy them up.’
- It is also apparent that Marketing Matters contend that as part of this work Mr Roberts was asked to repaint the bulkheads as part of painting the restaurant interior walls and ceilings. That is included in the scope of works relied on by Mr Lowry (‘pick out light bulkhead in grey’). The earlier statement of Ms Cordner makes no reference to bulkheads but does state Mr Roberts was asked to carry out ‘minor filling to cornices after electrical work done’ and she reiterated that in oral evidence. Cornices are not referred to in the scope of works relied on by Mr Lowry. Although cornices and bulkheads are both likely to be located between the ceiling and walls, they are quite different architecturally speaking. Ms Cordner’s reference to cornices may have meant the bulkheads. It would make sense that repairs to bulkheads would be required after electrical work. Mr Roberts agreed with Ms Cordner that he was asked to repair cornices but cornices are not specifically mentioned in Mr Bean’s report. I infer any work to cornices is included in the ceiling work.
- The evidence of Marketing Matters was that the builder had installed a Tasmanian Oak bar and Mr Roberts was asked to do ‘another light sand and a clear coat’ to the bar front and trim. At the time the shelves later installed on the wall behind the bar were not in situ. Although Mr Stewart said in oral evidence he could not be sure whether QLD Painting did sand and coat the shelves after they were installed, Mr Roberts said it had only been the shelves at the counter they did.
- Mr Roberts’ recollection of the work involved in painting the restaurant interior was that more preparation and a greater number of coats were required than what was suggested by the evidence of Ms Cordner and Mr Stewart. He relied on Mr Bean’s second report as setting out what work was performed in this area.
Works to restaurant exterior
- There was an outdoor deck adjacent to the restaurant. Ms Cordner’s oral evidence was that an incorrect product had been applied to the marine ply ceilings which resulted in ‘dripping’ whenever it became wet. The ply ceiling also extended to an area of driveway. Ms Cordner said she discussed with Mr Roberts using a wool applicator and water to take off the surface coating and apply a new clear coating to the entire area. Mr Roberts denied any discussion had occurred as suggested by Ms Cordner. He said this ceiling required a complete sand by hand and numerous coats to be applied. Essentially Mr Roberts claimed the work undertaken in the restaurant interior was as set out in Mr Bean’s second report.
- It was uncontroversial that Mr Roberts was also asked to paint the exterior concrete pillars and steel bulkheads in the external area.
- Ms Cordner said that sometime after work was commenced by Mr Roberts on 27 November 2014, she asked Mr Roberts for advice about second-hand timber furniture bought online. Most of the furniture was stored off site whilst renovations were being carried out but she had a few items at the restaurant she was able to show Mr Roberts by way of sample. She said she had scrubbed all the pieces of furniture which had chewing gum and such like stuck to it. She said she had asked two other people about this furniture and they had not wanted to work on it due to it having a fine veneer surface which might be sanded right through. She said she thought that she had told Mr Roberts about this concern although she did not remember specifically doing so. She said she asked Mr Roberts if he could give the furniture a light sand and fill in chips and patches which had been gouged out on three or four pieces.
- Invoices from the purchase of the furniture indicated there were 38 items comprising seven tables, two high tables, fourteen seats and fifteen bar stools at a cost of $3,368.64. The evidence of Mr Stewart and Ms Cordner was that the café chairs with metal legs Mr Roberts had included as part of the scope of works as advised to his quantity surveyor were purchased second hand for $10 each and were not amongst the furniture they’ asked Mr Roberts to work on.
- It was agreed that work on this furniture was carried out off site and that QLD Painting transported the furniture. Marketing Matters evidence was that Mr Stewart’s dual cab and trailer was used to transport the furniture although it was accepted that a vehicle owned by an employee of QLD Painting may also have been used.
- Painter Steven Mackenzie was one of the persons asked by Ms Cordner to look at the furniture. His evidence was that he had:
…inspected a piece of box-like furniture which has been claimed to have had four coats of polyurethane sealer applied to it. The veneer has been sanded through in places with somewhat harsher sanding than necessary. The absence of any coating on one complete side of the box strongly suggests that less than four coats has been applied. The claim that QLD Painting & Coatings took some 800 hours of labour to apply the materials charged to the works that I’ve inspected both before and after it was done is extremely surprising to me and I would support a figure much closer to the calculation of the quantity surveyor.
- The evidence of Mr Roberts was that the items of furniture he was asked to repair was ‘close to 100’.
- The letter dated 20 June 2016 by his employee Ian Harris stated this furniture:
…had to be sanded back to bare timber and four coats of polyurethane clear was applied. There were four to five men sanding eight hours a day for several days.
At the hearing when cross-examined, Mr Harris had difficulty recollecting how many items of furniture were involved. When asked whether he could provide a ballpark figure he said ‘maybe a handful, 12 or-I don’t know’. He said there were ‘at least six’, and then ‘five or six’ men sanding.
- The statement of QLD Painting’s employee Christopher English states the furniture ‘comprised of 15-20 Tables, benches and chairs’, that ‘there were two employees on orbital sanders, sanding down the furniture for approximately a week’ and that they applied ‘at least two coats of clear varnish to every piece of furniture’ which ‘took quite a number of days for three employees.’ Mr English had passed away by the hearing as I have mentioned and was not available for cross-examination but this document was actually filed by QLD Painting.
- Mr Roberts asserted that the work required to be carried out was set out in Mr Bean’s second report.
Repair to steelwork
- Ms Corner outlined the final jobs she said Mr Roberts was asked to undertake. She described some chipping on the black painted posts at the front of the building which she thought was caused by ladders being banged and scaffolding removed. She said a couple of pillars at the front had minor chipping. A plastic downpipe had paint removed at the base. There was chipping to the handrails on the stairs she attributed to scaffolding and such like being taken up and down so that the work did not look brand new. It was stated in Marketing Matters Response to minor civil dispute filed in 2015 that when Mr Roberts was asked about this chipping he said no undercoat had been applied and Mr Stewart had asked Mr Roberts to advise if any of the other metal work had not been prepared properly. Ms Cordner stated she had asked Mr Roberts to do the handrails on the stairs and the downpipe but denied that Mr Roberts said he would not be able to guarantee the finish unless all areas were stripped or that Mr Stewart told Mr Roberts to do so. The Response alleged that over a period of a day, whilst Mr Roberts was on site, paint stripper was applied to every piece of black painted metal work on both levels of the building ‘regardless of whether it needed it or not’ and ‘was left to dry.’ In the Response it was alleged that Ms Cordner, when realising what had been done, immediately questioned Mr Roberts who alleged Mr Stewart told him to do it, which Marketing Matters denied.
- Marketing Matters contended that the building was brand new, certified on 9 December 2014 and, had the paintwork been defective, the builder would have attended to it under warranty. Marketing Matters also asserted that the upstairs level of the building was occupied by the business operated by Fusion Airlie Beach Pty Ltd and Marketing Matters could not and would not have directed works be carried out there.
- In the Response filed in 2015 for Marketing Matters it was stated that the work was stopped by Ms Cordner and Mr Stewart because Mr Roberts ‘could offer no satisfactory solution to the damage that had been created by his unskilled employees’ and ‘we could see no other option than to order them off the site so we could begin to clean up some of the mess.’ That is somewhat different to Mr Stewart’s account in his statement dated 24 May 2016. In that statement, he said on 24 December 2014, he observed three painters arrive at 6.30am and having not commenced work at 8am, voiced concern to the supervising worker, Chris. Chris rang Mr Roberts to tell him Mr Stewart was unhappy and Mr Roberts instructed the painters to leave the site. That also accorded with the account given by Mr Stewart at the hearing as well as Mr Roberts’ version. Mr Roberts contended that he ordered his workers off the site at that point as Marketing Matters were in ‘breach of the agreement’ which was to pay invoices within seven days.
- Builder Mr Bates gave evidence of $4,000 of paintwork being performed as part of the contract for the building extension and outlined what was involved with the painting of the steel work. He recalled in particular the steel handrails being done by an auto spray painter he employed whom he described as going ‘overboard’ on the preparation so that it cost him a ‘shitload.’ He recalled Ms Cordner contacting him about chipping which had occurred on the hand rails to the stairs and that the paint on those had probably not had time to harden properly so was damaged by tradesmen knocking them with ladders, scaffolding or tools.
- In Mr Bates’ opinion there was no reason for the steel paintwork to be redone and could have been remedied by minor sanding where the chips occurred and reapplication of two topcoats.
- Mr McDonald, who had certified the building extension, included in his statement the observation that:
…all building and paintwork had been completed by (Mr Bates) to the highest of standards using high quality preparation and products. All of the steelwork, posts, framework, handrails and staircase stringers had been prepared by the builder to my satisfaction. I have recently been advised by the applicant (Marketing Matters) that the respondent (QLD Painting) attempted to redo the steelwork after I issued the final inspection certificate. I do not understand why any such works needed to be done…as they were already done to a high standard by the builder.
- Painter Mr Mackenzie had not done the work for Mr Bates on this occasion but carried out the repainting of the steelwork in July 2016.
- Mr Mackenzie was critical of the work undertaken by QLD Painting on the handrails where no top coat was applied. It could be assumed no top coat had been applied because QLD Painting left the job without completing this however Mr Mackenzie noted an unsuitable primer had been applied.
- Mr Mackenzie noted: ‘an area on almost every face of each post of this large steel structure had paint stripper applied to it, left to dry’. He considered it an inappropriate material to use on that site and stated:
…given the pattern of the paint stripper on each post and rail, given the obvious presence of the bright-blue factory-applied primer on every post and the sound nature of remaining original paintwork, the only conclusion I could reasonably reach was the paintwork had been intentionally damaged in as many areas as possible to ensure the needless work could not be stopped. In 17 years of experience, I see no reason to strip large areas of paintwork to assess whether the metal has been properly primed. A simple scratch or sanding to a small test area would have been sufficient to tell. The stair handrails had been carelessly stripped and damage was visible to the yellow step treads, new floor tiles and adjacent decking. I could see where a mixture of melted black paint and paint stripper had been allowed to drip from the rails.
- Mr Roberts’ position was that he was instructed to carry out whatever rectification of the steel work was required as assessed by him, not limited to the handrails, front pillars or downpipe. He asserted that his advice was that he could not guarantee work unless he stripped it back to bare and reapplied primer and top coats. He said had commenced that work when he ordered his men off the job due to not being paid.
Rear External Wall and Driveway Blockwall and Gates
- These are included at Items 1 and 2 in Mr Bean’s report prepared on behalf of QLD Painting. Mr Stewart and Ms Cordner were adamant that these areas were not part of the work Mr Roberts was asked to undertake and that QLD Painting at no time under their instruction, painted these areas. They said that until Mr Bean’s second report was filed, at no time since the dispute arose were these areas suggested by Mr Roberts to have been part of the scope of works.
- Former employee Ms Laurent, who worked at Fusion between July 2014 and February 2015, gave evidence that it had been Mr Stewart who painted the rear wall, driveway tunnel and gates in July 2014. She also gave evidence that the metal legged café chairs had arrived in new condition and were not removed at any time for repair.
- Former employee Ms Rae, who worked at Fusion between February 2015 and August 2016, gave evidence that after a lease had been agreed with the new company, Mr Stewart had finished the cutting in on the rear wall and applied a second coat.
- Mr Harris in cross-examination appeared to be unable to recollect painting the back wall of the premises. He had some recollection about the driveway area but indicated he had been involved in painting the premises on an earlier occasion, not the time in question, and that his recollection could have related to that.
Costs of rectification
- Ms Cordner and Mr Stewart’s evidence was that they delayed rectification of the steel work believing a court or tribunal outcome was necessary to determine how the work was to be undertaken and by whom. They said they had then had to go ahead with the work without further delay or risk losing rent from the transfer of the lease of the premises. They alleged Marketing Matters negotiated a rental contract with an incoming tenant to commence on 1 July 2016 but that tenant ‘refused to commence the contract until rectification works had been completed as they were not prepared to have a major interruption to their new business operation.’
- In addition to the costs of actually having the work carried out by Mr Mackenzie, Marketing Matters claimed the loss of freehold rent and outgoings as well as loss of motel income due to closure of three front rooms for seven business days.
- Mr Mackenzie provided Marketing Matters with a quote to rectify the steel work dated 13 March 2015 for $9,900. He provided a later quote, dated 21 May 2016, of $16,692.50 and completed the work for that cost in July 2016. In oral evidence, Mr Mackenzie stated that the majority of the increase in price was the deterioration of the steel work requiring greater preparation. He specifically said that an increase in labour rates and material costs was not a significant factor nor the deadline involved in completing the work.
Report of Mr Lowry
- Mr Lowry, as stated in his report, was engaged by Marketing Matters to provide an estimate on the reasonable cost of painting works undertaken at the Airlie Beach premises by QLD Painting & Coatings to determine if work billed, under the cost plus contract was proper and reasonable for the quantity of work performed.
- The scope of works Marketing Matters instructed Mr Lowry that QLD Painting was asked to carry out is attached to his report. Mr Lowry inspected the site with Mr Stewart for about two hours on 21 October 2015. At that time Mr Mackenzie had not undertaken the repainting of the steelwork alleged to require rectification.
- Mr Lowry has provided an estimate of the costs of rectification of the steel work as well as an estimate of the reasonable costs of the work performed by QLD Painting & Coating.
- Mr Lowry’s report sets out his methodology. He measured and priced the work and rectification cost based on the scope of work provided and his observations on site ‘using market average contract rates and prices, modified as required for the work described (eg, one coat only).’
- Mr Lowry stated he estimated the average labour hours required to undertake the work done and adopted (modified) production and labour unit rates published in Rawlinsons Construction cost Guide and Planning Planet.com. He estimated paint quantities for the work described using paint coverage rates published by Dulux and Wattyl paints.
- In Mr Lowry’s opinion, the charges for labour and material claimed by QLD Painting are significantly more than would be expected of a reasonably competent contractor. Mr Lowry estimated 124 hours labour was reasonable as opposed to the 719 hours charged by QLD painting. He estimated 25 litres of sealer/undercoat/acrylic was reasonable as opposed to the 144 litres claimed and 33 litres of clear coating compared to 40 litres claimed.
- Mr Lowry’s CV, over 12 pages long, sets out more than 40 years’ experience in the profession of a quantity surveyor, commencing in 1965. He became a life fellow of the Australian Institute of Quantity Surveyors in 2008. His extensive professional development, experience, competencies and consulting history was impressive.
QLD Painting & Coating’s Position
- QLD Painting three invoices have been provided as set out in paragraph 40. The invoices set out the number of men (between three and seven) and the hours worked for each day which ranged from nine hours on 30 November 2014 to one hour on 24 December 2014. Generally all the men are shown to have worked the same number of hours each day, the only exception being 10 December 2014, when two men are shown to have worked 5.5 hours and four men for 8 hours. Costs for materials are included as a separate amount.
- The documents provided by QLD Painting described as ‘Timesheets, payslips and bank records related to the Fusion Job’ comprise: a restatement of the hours claimed on the second and third invoices; pay slips for three employees, Ian Harris, Edmond Weise and Daniel Gurr; job cards for two ‘subcontractors’ Paul Atkins and Chris English; pages of bank statements with withdrawals to Mr Harris, Mr Weise, Mr Gurr and Mr Atkins highlighted; lodgement receipts for Mr Atkins and Mr English; and pages from Cash Disbursements Journal with payments to those men highlighted.
- QLD Painting did not provide job cards for all the painters for all the days on the Marketing Matters job although the evidence of Mrs Roberts, as bookkeeper, was that the times had been calculated from time sheets, that is job cards, prepared by employees and submitted fortnightly. When pressed on why these time sheets had not been provided, Mrs Roberts’ evidence was that they had likely been shredded. She said after timesheets were used to calculate hours worked they would be shredded within a couple of weeks or a month later. She said in relation to the three job cards which were provided, they were ‘the ones I could find that didn’t get shredded.’
- It was submitted for QLD Painting that the payslips and bank statements provided was evidence of employees on the job being paid according to the amounts invoiced to Marketing Matters. QLD Painting was unable to explain why they had invoiced Marketing Matters for up to seven men with only five names being provided in the payslips and statements. Mr Roberts time on the site had not been included as part of those invoices.
- Other anomalies in this documentation are evident. Mr English’s job card for the fortnight ending 18 December 2014 indicates he worked 7.5 hours at Fusion on 5 December whereas the invoices to Marketing Matters do not have an entry for that date. The same job card shows the hours worked on 8, 9, 10, 11 and 12 December are respectively 4.5, 8, 8, 4 and 3.5; only the entry for 10 December tallies.
- Mrs Roberts’ evidence as to the charges for materials for Marketing Matters job was that all materials had come out of stock and were not purchased for the job. She said Mr Roberts would simply advise her the value of stock used to include on invoices.
- Ms Raitt’s evidence was at odds with that of Mrs Roberts. She said that the physical paper time sheets made by employees were used to prepare the payroll and kept as a hard copy file for the period required by the ATO which she understood was five or seven years. She said timesheets would be thrown out once storage became an issue. When asked whether it was an exception to the rule that some timesheets were destroyed, she agreed saying that would occur if someone made a mistake or they were no longer required, pointing out there were a lot of sheets to keep for a five year period.
- Ms Raitt also did not recall that paint stocks were kept for very long. She described generally paint being purchased for a job and kept aside for that job. When asked how paint was costed to a customer which was not brought in especially for a job, she replied ‘we don’t do that.’ In re-examination she reiterated that generally a large stock was not kept but that there would be instances where undercoat or similar would be in stock for regular use.
Report of Mr Bean
- Mr Bean’s first report dated 16 June 2019 makes comments about the reasons for cost plus contracts and the problems associated with that type of agreement. His ultimate conclusion is that:
…the claim that the contractor’s charges for labour and material were significantly higher than would be expected if quoting using a $/m2 and that of a competent contractor has no bearing on this Hourly Rate Cost Plus Contract.
- Mr Bean’s subsequent report was completed after inspecting the Airlie beach premises and is dated 23 February 2017.
- Mr Bean stated that he had not referred to Rawlinsons ‘or other Literature and has used his vast experience’ which he details in his report. He said his ‘knowledge of the local Mackay & Whitsundays Building Costs far outweighs any costings that are printed in Books Edited by Cost Estimators located in Southern States’ and that:
…his knowledge of the Trade Labour time to paint a wall or plaster a wall or any building trade to carry out new, repairs or rectification is paramount in the attached costings relating to the Scope of Work provided by the Respondent.
He also referred to vast his experience and trade qualification in French polishing.
- Although Mr Bean’s report states that cost-plus work is an open book process where bills from the contractor include documentation of all hard costs, including invoices for materials, nowhere is it apparent that such documentation was provided by QLD Painting to him. Instead, Mr Bean attended the site with Mr Roberts, discussed the scope of works carried out and carried out onsite measurements.
- Mr Bean’s report sets out what he calculates the costs to be of nine items as follows:
Item 1 - Repaint Rear External Wall of the Café (4 photographs attached)
Total cost estimated $2,992.50
Item 2 - Repaint Driveway Blockwall and Gates (3 photographs attached)
Total cost estimated $1,417.50
Item 3 - Repaint Amenities Room x2no. (6 photographs attached)
Total cost estimated $ 742.50
Item 4 - Repaint and Repair Kitchen & Café Area (7 photographs attached)
Total cost estimated $4,545.00
Item 5 - Sand and Clear Coat Ply Ceiling and 1st level Ply Wall (2 photographs attached)
Total cost estimated $2,520.00
Item 6 - Café Pillars Repaint Columns
Total cost estimated $ 270.00
Item 7 - Sand and Clear coat Insitu New Bar work, Shelving and Counters
Total cost estimated $1,620.00
Item 8 - Timber Ply Furnishing (100 no.) (7 photographs attached)
Total cost estimated $20,210.00
Item 9 - Strip Steel Column and Beams (3 photographs attached)
Total cost estimated $1,260.00
- These estimates are exclusive of GST. Once GST is included, the total calculation of costs is $39,135.25, which is $1,036.75 greater than the sum of the three invoices, $38,098.50, raised by QLD Painting (refer to paragraph 40).
- At the hearing, Mr Bean’s evidence in relation to the furniture, was that he had downloaded photographs of Fusion from the internet and ‘counted them off the photographs’. He said ‘you can work out roughly how many items are in each section’ and that Mr Roberts had told him it was roughly about 100 pieces. This appeared to include metal legged café chairs which would have been present in photographs. He stood by his calculation of 96 hours to transport the 100 items the 16 km round trip where they were sanded off site.
- Mr Bean’s report stated his knowledge of the building industry extends for 36 years starting from an apprentice, to carpenter, to Degree in Quantity Surveying, Building Estimator, Contract Administrator/Site Manager/Junior Project Manager and details his work experience in an appendix over three pages.
What was the agreement?
- QLD Painting entered into an agreement with Marketing Matters to carry out painting and decorating work at an hourly rate of $45.00 per worker plus costs of materials. I reject the argument of Marketing Matters that the agreement provided that workers to be charged out at that rate were required to have any particular qualification. In the absence of any specific representation that only persons with a particular painting qualification would be employed on site, I do not find that argument can be sustained by Marketing Matters, that is, that QLD Painting could only charge $45 per hour for each ‘qualified’ painter.
- However it would be necessary that QLD Painting be able to document not only the calculations for labour charged but also expenditure incurred for materials, whether that was invoices for materials purchased or calculations of the cost of materials otherwise supplied for the job.
- The documentation provided by QLD Painting fell well short of establishing the hours worked on the job. In my view, time sheets for all employees or subcontractors ought to have been available which recorded the hours worked on the Marketing Matters job. The explanation that such documents were routinely shredded within weeks was not credible given the evidence of Ms Raitt, whom I found to answer in a direct and straightforward manner. Ms Roberts by contrast, avoided answering directly, kept insisting the information all linked up when it did not and ultimately fell to explaining glaring error such as the number of men charged for the job as a ‘typo’ for which she had ‘no other explanation.’
- QLD Painting relied on the report of Mr Bean as supporting that the hours claimed were reasonable. There are difficulties with Mr Bean’s report unrelated to his methodology and that is the instructions given to him by Mr Roberts as to what comprised the scope of works to be undertaken by him.
What was the Scope of Works Undertaken?
- I make the general observation that by the date of hearing, which took place over a period of 12 months over five separate days, all witnesses had areas of difficulty recalling some details with some inconsistency apparent from earlier statements. I found both Ms Cordner and Mr Stewart tended to concede that difficulty whereas Mr Roberts was more adamant that his current recollection was accurate, even when clearly from collateral evidence that was not the case. One example is that set out at paragraphs  and .
- I am satisfied on the balance of probabilities that the scope of works did not include the rear wall of the building or the driveway walls or gates as claimed by QLD Painting. I prefer the evidence of Mr Stewart and Ms Cordner which was supported by Ms Laurent and Ms Rae. It may be that Mr Roberts genuinely is mistaken about that not being part of the scope of works. His lack of documented work sheets may account for that. Possibly he has been involved in the painting of those areas at some earlier time.
- The claim that the number of items of furniture renovated was in the vicinity of 100 is more difficult to understand. I do not accept that an accurate estimate of the furniture involved could be achieved as described by Mr Bean having regard to photographs on the internet. On the balance of probabilities, I am satisfied that the items of furniture worked on by QLD Painting was the 38 pieces as purchased by Marketing Matters as evidenced by the invoice provided and the clear recollections of both Ms Cordner and Mr Stewart.
- Those conclusions seriously compromise the value of Mr Bean’s report, having been prepared on the basis of Mr Roberts’ instructions as to the scope of works. If the report is submitted as supporting that the hours claimed are justified according to Mr Bean’s calculations, it has failed to do so in light of my finding that Mr Roberts’ representations as to the scope of works are not credible.
- Mr Lowry’s report has been prepared on the basis of a scope of works instructed by Marketing Matters which I have found to be the more credible. Mr Lowry’s professional qualifications are significant. I am satisfied, on the balance of probabilities, that as regards the works undertaken by QLD Painting for Marketing Matters, that Mr Lowry’s estimate of what was the reasonable cost for those works is the more accurate in circumstances where QLD Paintings documentation does not support the claimed hours and the report of their expert has been prepared with incorrect information.
Claim for reimbursement
- I would therefore allow reimbursement claimed in the amount of $11,027.55, calculated as the first invoice amount paid ($15,782.25) less the amount assessed by Mr Lowry as the reasonable cost ($4,754.70).
Cost of Rectification of Steelwork
- Whilst accepting that in addition to repairing chips which had occurred to the handrail and front pillars, Mr Roberts may have been asked to repair areas of steelwork which he assessed as being improperly finished, the manner in which QLD Painting went about that work, is concerning. The new extension which included the steelwork had just been certified on 9 December 2014. Accepting the evidence of the certifier, Mr McDonald, the builder, Mr Bates and the painter, Mr Mackenzie, and having found Mr Roberts less credible than other witnesses in other respects, I am satisfied that the application of paint stripper to large areas of new steelwork, whether done on direct instruction by Mr Roberts or another supervisor, or whether done incorrectly by an employee, was not justified nor required as part of the work requested by Marketing Matters. It therefore follows that QLD Painting cannot claim costs of such work.
- I also find it reasonable that Marketing Matters rectified the damage caused to the steelwork by application of the paint stripper by QLD Painting.
- Mr Lowry estimated the cost of such rectification to be $13,597.65 in his report dated May 2016. The actual cost charged by Mr Mackenzie, who carried out the work in July 2016 was $16,692.50. The evidence given by Mr Mackenzie was that the increase from his initial quote in March 2015 of $9,900.00, was as a result of the deterioration in the steelwork. The evidence of Marketing Matters was that they did not proceed with the rectification work pending the matter being litigated and only proceeded with the work to satisfy the requirements of a new lease holder. That was unfortunate, given the deterioration of the steelwork. I am satisfied, on the balance of probabilities, Marketing Matters, by delaying the rectification work, did not mitigate their loss and that it is appropriate to allow the earlier amount quoted for rectification of $9,900.00. I will order that sum be paid by QLD Painting.
Claim for Loss of Income
- Marketing Matters claimed that the process of rectifying the damage resulted in losses to the business of $14,777.28 for lost rent, $2021.70 outgoings and $3675.00 loss of income from the motel. There are a number of difficulties with those claims.
- If the loss of rent and further outgoings paid resulted from the delay in transferring the lease to the new owner, it could be expected that there would be earnings during the period which should be off set against these losses. In any event, such losses appear to be a result of a delay by Marketing Matters in carrying out the rectification work. I have already found that such delay constituted a failure to mitigate loss and I will not allow these sums claimed.
- I order that QLD Painting & Coatings Pty Ltd pay to Marketing Matters Pty Ltd by 4pm 19 September 2019 the sum of $20,927.55, being refund allowed of $11,027.55 plus rectification costs of $9,900.00.
- I note that this order is only for part of the sum sought by Marketing Matters and that both parties have expended considerable amounts in litigating the matter. I will however make additional orders to allow for the parties to make submissions in relation to costs should they wish to do so.
- Marketing Matters Pty Ltd file in the Tribunal two copies and give QLD Painting & Coatings one copy of any written submissions and supporting documentation in relation to costs by 4pm 19 September 2019
- QLD Painting & Coatings Pty Ltd file in the Tribunal two copies and give Marketing Matters Pty Ltd one copy of any submissions and supporting documentation in response to any application for costs by 4pm 3 October 2019.
- Any application for costs be determined by the Tribunal on the papers without an oral hearing not before 4pm 3 October 2019.
- Published Case Name:
Marketing Matters Pty Ltd v QLD Painting & Coatings Pty Ltd
- Shortened Case Name:
Marketing Matters Pty Ltd v QLD Painting & Coatings Pty Ltd
 QCAT 265
04 Sep 2019